Little is known about the behavior of the gray-bellied caenolestid. It appears to be terrestrial (land-living) and crepuscular (active around twilight) or nocturnal (active at night).[1] It appears to be an "opportunistic feeder". Analysis of stomach contents of individuals from Peru suggested a diet comprised largely (up to 75%) by invertebrate larvae (such as arachnids and centipedes); small vertebrates and plant material are also consumed.[8] A pregnant female captured in Ecuador was found to have two fetuses in its womb.[9]

The gray-bellied caenolestid inhabit cool, moist areas with good cover; it is known from humid, temperate forests at altitudes of up to 2,900 metres (9,500 ft), and moist grasslands in the subtropics. It occurs in small tunnels under tree roots by streams.[8] The range covers western Ecuador and northwestern Peru. The IUCN classifies the gray-bellied caenolestid as near threatened. Its population has decreased by nearly 20% since the 1990s; numbers are feared to be declining due to deforestation and agricultural expansion.[1] The gray-bellied caenolestid occurs in Cajas National Park and Mazán Ecological Reserve.[10]